When it comes to recruitment and onboarding, employers should take the time to become familiar with the employment rules of the province in which their business functions. A significant part of this process is in formalizing the employment connection between businesses and individuals with a contract. This agreement is the requirement of any employment relationship, whether made verbally or in writing. However, without a written agreement, the employment relationship is governed by common law. Most notably, the employment contract exists to shield you and your business.

3 Employment Contract Essentials

Here’s a list of common questions outlining what you need to know about the employment contract.

  1. What is an employment contract?

It is an agreement that identifies and defines the terms of the working relationship between employers and employees.

  1. Is an employment contract the same as offering a person a job?

No. A contract is more detailed than a job offer, which is used to casually offer a position to a contender.

  1. When is an agreement legally binding?

Whether written, stated verbally, or implied, every employment relationship is a binding contract.

How to Create a Standard Employment Contract

When creating a contract of employment for new hires, remember, this document serves a purpose to aid in addressing any conceivable work-related differences by setting out performance expectations. The agreement is also the opportunity to elaborate on an employee’s responsibilities to you, as the employer, in areas such as non-competition, non-solicitation, and confidentiality.

While a contract cannot address every possible issue, at the very least, you should cover the minimum requirements set by the Employment Standards Act (ESA).

You can use this check-list when drafting your contracts:

  • Employment statement
  • Definitions
  • Terms
  • Duties and responsibilities
  • Payment
  • Employee benefits
  • Leave privileges
  • Notice of termination
  • Non-competition
  • Confidentiality agreement and privacy policies
  • Ownership of intellectual property
  • Governing Law

The last box to check off, is to formalize the contract with the candidate’s signatures and the effective date.

An employment contract is an imperative document to have in place if you are hiring an employee, contractor or freelancer. There are templates online to use as a starting point to protect your business and yourself, as well as set clear expectations on the role for the worker.